Chestermere City Council received the Utilities City Governance Utility Co. 2020 Audited Financial Statements as information during the April 27 Special Meeting of Council.
“As per our independent auditor’s report, the 2020 financial statements present fairly in the financial position of the corporation, its financial performance and cash flows,” said Team Lead, Customer Service & Accountant, Kellie Pratt.
In total the utility company’s assets increased by 4.6 million, the significant changes include accounts receivable, property and equipment.
The total accounts receivable increased by $477,000, as a result of the COVID-19 pandemic.
“The utility company established a utility deferral program that allowed residents to defer their monthly payments from April to August 2020. Approximately 11 per cent of customers took place in the deferral program,” Pratt said.
Once the deferral program concluded, customers were contacted to set up a payment plan, with the amounts being paid off by the end of February 2021.
In 2020, the utility company added 7.3 million worth of assets, out of the assets 6.4 million were contributed assets from the City of Chestermere, in relation to Township Road 240.
The remaining $900,000 related to a lift station re-direction project, stormwater feasibility project, and service replacements.
The liability and shareholders’ equity increased by 4.6 million, the significant changes included defers in revenue and long-term debt.
“For deferred revenue, this is cash or contributed assets that have been received but not yet earned from a revenue perspective. Deferred revenue is recognized as the amounts become earned, and deferred revenue consists of off-site levy, cash received, grant cash received, permit fee cash received, and contributed assets received,” Pratt said.
In 2020 the utility company recorded deferred revenue in off-site levy permit fees and contributed assets.
“Out of the 7.5 million recorded in deferred revenue 6.4 million relates to contributed assets from the City of Chestermere,” Pratt said.
Due to the repayment of the long-term debt, the long-term debt decreased by $702,000.
The utility operated with a line of credit throughout 2020 as a result of the no new authorized debt direction from council.
“At the end of 2020, the utility company had a $426,000 line of credit, and 2 million in restricted cash, this is off-site levy cash that is held and to be used for growth-related infrastructure projects,” Pratt said.
The total net income increased by $650,000, total revenue increased by $773,000, the increase in revenue relates to insurance reimbursement, growth, and increase to development off-site levy revenue.
Total expenses increased by $123,000, the increase in expense relates to a loss, which resulted in a paper loss and not an operational loss.
“In 2020, the Chestermere Utilities Incorporated (CUI), old office space was subleased, and since it was subleased at a lower value than the original office leases a paper loss of $155,000 was recorded,” Pratt said.
Over 1 million was allocated to administration and board service lines.
Expenses decreased mainly due to the efficiencies gained by the transition of finance, administration, and customer services to the City of Chestermere,” Pratt said.
In addition, due to improved collection services, debt expense has also decreased.
Water revenue increased by $102,000 due to growth and an increase of water bill to customers, and water expenses decreased by $115,000 as a result of a EPCOR contract that decreased the operations and maintenance contract.
Both revenue and expenses increased for sanitary by approximately $470,000.
Storm revenue decreased by $34,000 due to an 8 per cent decrease in residential stormwater rates, and storm expenses decreased by $69,000, due to efficiencies gained from the transition of stormwater services to the City of Chestermere.
Solid waste revenue increased by $46,000 due to growth, being offset by an increase in solid waste expenses of $219,000.
The eco-center revenues increased by 10,000 which was a result of growth, with an increase in expenses of approximately $27,000.